US right’s focus on poverty, rather than inequality

By Robert Reich / The Observer

US President Barack Obama calls inequality the “defining challenge of our era.” Polls show that a majority of Americans now believe that inequality has grown over the past decade and favor tax increases on the wealthy to help the poor.

The non-partisan Pew Research Center recently found that six out of 10 Americans believe that their economic system unfairly favors the wealthy.

So what is the reaction of conservatives to this? They want to change the subject. Those with presidential ambitions say the focus should be on poverty rather than inequality. US Senator Marco Rubio points to the “lack of mobility” of the poor as the core problem, while US Representative Paul Ryan blames their isolation from the mainstream of the country.

“On every measure from education levels to marriage rates, poor families are drifting further away from the middle class,” Ryan said.

Conservative New York Times columnist David Brooks argues that the “interrelated social problems of the poor” have nothing to do with inequality and even some Democratic operatives are worried that talking about inequality will turn off voters.

“However salient reducing income inequality may be, it is demonstrably less important to voters than any number of other priorities” — including reducing poverty — Democratic pollster Mark Mellman wrote.

This is rubbish; widening inequality is making it harder for the poor to escape poverty and thwarting equal opportunity. Let me explain: When almost all the gains from growth go to the top, as they have for the past 30 years, the vast middle class does not have the purchasing power necessary to keep the economy growing and generate lots of jobs.

Once the middle class has exhausted all of its coping mechanisms — wives and mothers surging into paid work (as they did in the 1970s and 1980s), longer working hours (which characterized the 1990s) and deep indebtedness (from 2002 to 2008) — the inevitable result is slower growth and fewer jobs.

Slow growth and few jobs hit the poor especially hard because they are the first to be fired, last to be hired and most likely to bear the brunt of declining wages and benefits.

A stressed middle class also has a harder time being generous to those in need. It is no coincidence that the tax revolts that began thundering across the US in the late 1970s occurred just when middle-class wages began stagnating. Helping the poor presumably requires money, but the fiscal cupboard is bare and the only way to replenish it is through tax increases on the wealthy, because the middle class is stretched to the limit. The shrinking middle class also hobbles upward mobility, because not only is there less money for good schools, job training and social services, but the poor also face more difficulty moving upward because the income ladder is far longer and its middle rungs have disappeared.

US conservatives also do not want to acknowledge any connection between widening inequality and unequal political power. For example, Brooks warns that any discussion of unequal political power will make it harder to reach political consensus over what to do for the poor.

Yet it is precisely the concentration of power at the top — which flows largely from the concentration of income and wealth there — that has prevented Washington from dealing with the problems of the poor and the middle class.